Wimpy on buyout menu for £20m

Wimpy, Britain's oldest hamburger chain, is being sold to its management in a £20m deal backed by Bank of Scotland.

Max Woolfenden, Wimpy's long-serving chief executive, is buying the business from its venture capital backers 3i, Bridgepoint Capital and Lloyds Development Capital.

Wimpy, which runs about 300 fast-food burger restaurants in the UK and Ireland, generated profits of £1.5m in the year to March 2001 compared with £1.8m in the previous year. Turnover has remained static at about £20m.

Wimpy takes its name from J Wellington Wimpy, the burger-loving character in the Popeye cartoons. The chain was founded nearly 50 years ago when J Lyons opened the first restaurant in 1954. In 1977 the business was sold to United Biscuits which opened a string of counter-service outlets to meet the growing demand for fast food.

The chain was sold again 12 years later to Grand Metropolitan, the drinks and leisure group, which already owned Burger King and was mostly interested in the counter-service part of the business. In 1990 3i, Bridgepoint and Lloyds acquired the brand for £17m.

Bank of Scotland, now part of the HBOS banking corporation, is providing equity to help fund the acquisition through its integrated finance division. The sale process is being handled by Deloitte & Touche.

While HBOS would not confirm the deal, leisure industry sources say it is keen to continue expanding the Wimpy brand by opening new sites. Woolfenden is also thought to be committed to developing Dr Beaks, a sister brand operating fried-chicken restaurants.

Woolfenden is also thought to be eager to open drive-through restaurants to rival McDonald's and he is seeking a European joint venture partner to help launch the business on the Continent.